Jensen wants to eliminate the income tax, so he should tell us how much he’d personally save
GOP nominee for governor Scott Jensen at an event in early May. Photo by Nicole Neri/Minnesota Reformer.
Republican candidate for governor Scott Jensen and his running mate Matt Birk don’t want to release their tax returns because, Jensen says, “I honestly don’t think we can trust the media to stay focused on the issues.”
Unfortunately for Jensen, he may as well be talking about his own campaign, which has the focus of a sugared-up toddler in a toy store.
To wit: He kept talking about how COVID restrictions were like Nazi Germany, even after Jewish Minnesotans — actually, Minnesotans of all stripes — told him to please stop.
He released an ad falsely claiming abortion rights in Minnesota can’t be taken away by a governor, even as he begged us all to stop talking about abortion.
And, he agreed to be a speaker at a gathering of COVID-19 deniers and anti-vaxxers — a kind of public health Star Wars bar — just weeks before the election.
So we can be forgiven for getting distracted from the issues Jensen wants to focus on, like inflation, which the governor of Minnesota will have no effect on whatsoever.
Back to the tax returns. Normally, I wouldn’t care. It’s not like he’s running for president and covering up decades of tax fraud.
Jensen and Birk, however, are proposing eliminating the state income tax.
As the Reformer’s Michelle Griffith reported recently, doing so would create a $15 billion annual hole in the state general fund. Or about half the budget.
The only way to fill the hole: Deep cuts, which would have to come from big-ticket items like schools and health care for people who can’t afford it.
Or, a regressive tax hike, probably of the sales tax.
The state’s highest income earners would be the biggest beneficiaries of all this robbing of widows and orphans.
Jensen may well be a special case. Many doctors, lawyers, accountants and other professionals set up their businesses as S corporations, or what are also known as pass-through entities. That means all the profit of their business goes into the income tax pile.
So let’s say for the sake of argument — since he won’t share his tax returns — Jensen pays himself $500,000 per year, and his practice’s profit is $1 million.
If his medical practice is set up as an aforementioned S corporation, he would pay income tax on $1.5 million.
So if he succeeds as governor in eliminating the income tax, he wipes out all that tax liability.
Quite a windfall.
Let’s say he owned a more conventional C corporation and paid himself $500,000 and made $1 million in profit, and manages to eliminate the income tax. In that case, his savings would be considerably smaller — just the liability on the $500,000 he pays himself. Whereas the corporate profit would still be taxed under the existing corporate profits levy.
I asked his campaign spokesman if his medical practice is set up as an S corporation, but did not hear back.
Either way, Jensen and his running mate are wealthy men who would likely enjoy rich personal gains if they succeed in their reckless scheme to eliminate the income tax. (If they want to prove otherwise, they can just release the tax returns.)
The consequences, however, would fall on the rest of us.
We’d be socked with a regressive sales tax hike and/or damaging cuts to schools, state parks, the State Patrol, and services for people with disabilities.
We would suddenly be envious of Wisconsin.
Need I say more?
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